ModernMed, Sentry Equipment model successful cost cutting

When the daughter of a Sentry Equipment Corp. employee injured her ankle while out of town, the employee contacted Dr. Jodi Ritter, an osteopath who works at a clinic in Sentry Equipment’s Oconomowoc offices on behalf of ModernMed.

Ritter requested and received a smartphone photo of the injury and suggested icing it, thus saving the girl’s family — and Sentry Equipment — an expensive trip to the emergency room or urgent care clinic.

Stories like that please Sentry Equipment chairman and chief executive officer Mike Farrell, who has staked his manufacturing company’s health benefits to ModernMed. Farrell said his 145-employee company is saving in the low hundred thousands on its annual health care costs since signing on with ModernMed nearly two years ago.

Farrell is a firm believer in taking control of his company’s health care costs by investing in primary care services. He declined to disclose what he pays ModernMed, but said his company has reduced costs for primary care by about 55 percent, specialty care by 58 percent and outpatient services by 27 percent.

Sentry Equipment has a self-funded health insurance plan.

“We think you need to kind of control the front end of health care to make it work better so the back end is not so crazy,” Farrell said.

The era of employer health care costs increasing in the upper-single to double-digit percentages every year shows no sign of abating. The Affordable Care Act could continue or worsen that trend for at least the next year or two, experts predict.

With that backdrop, metropolitan Milwaukee has become ground zero for ModernMed, which provides on-site health care with physicians. The physicians can handle many basic services at a fixed per-employee cost and reduce costs by directing patients to lower-cost, but high-quality, specialists and imaging firms.

ModernMed now has 10 physicians on its roster in the metropolitan area and is recruiting another one. Some of those doctors, like Ritter, have come from large health care systems but others were in private practice, said ModernMed president Gene Miller. It has signed 15 area employers for its services and has seven customers in other states, Miller said. Group sizes run from about 30 to about 500, he said.

ModernMed was founded by suburban Milwaukee native Jami Doucette. He and his investors sold the company in January to a unit of DaVita Inc., which has the financial resources to expand the business into new states and into larger employers than before. ModernMed has relocated its headquarters to Denver from Waukesha.

Sentry Equipment has two ModernMed doctors at the on-site clinic. Each ModernMed doctor also runs his or her own clinic in a nearby community for only employees and families of ModernMed clients.

Each ModernMed doctor sees 500 to 600 patients, well below the workload for a physician in a typical group practice.

Ritter, who joined ModernMed after a stint at Aurora Health Care’s clinic in New Berlin, said she is able to spend more time with patients and gets to know them. They can contact her any time via her cell phone.

Hiring ModernMed has reduced the number of employees and dependents who enter the expensive fee-for-service model of health care systems, Farrell said.

“We do better because our doctor is an advocate for the patient,” Farrell said. “(The doctor) is not an extension of Aurora or ProHealth or Froedtert.”